SPX500 had reversed sharply lower from 4365 levels yesterday before finding support around 4280 mark. The indice might have carved a meaningful top or could be close to carving one before turning lower again. Bears might be back in control soon.
Looking at the wave structure, the indice has completed 5 waves from its March 2021 lows around 3700 levels. Furthermore, the above 5th wave is terminating at multiple degrees hence probability for a much deeper correction remains high.
Also note that SPX500 has dropped back below its Elliott Channel resistance line printing a low around 4280 yester. It is testing the backside of support turned resistance trend line and expected to resume lower from here.
If the above structure is correct, SPX500 might witness a strong bearish reversal towards 4150 mark in the next few trading sessions. Alternately, if prices push above 4365 levels, a shallow top might form towards 4375.80 zone.
Either from here or just above 4365 levels, SPX500 might be preparing for a major reversal lower. Please note that potential remains for a continued drop towards 4035 and 4000 mark going forward. Aggressive traders might initiate fresh short positions against 4365 levels.
Finacademy Technical Team
USDJPY could be progressing into a counter trend rally toward 114.30-50 zone in the next few trading sessions.
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.